From emotional distress to changes in lifestyle, many Colorado residents face new challenges when going through a divorce; however, these problems can get much worse without factoring financial decisions into a divorce agreement. Forbes has published findings by a Certified Financial Planner that outline a number of common mistakes people make during the dissolution of a marriage, and the findings present proper planning as the solution to avoiding disaster.
When it comes to personal finance mistakes, Forbes points out that separated spouses often go into debt to purchase items like new clothing or vehicles without considering the diminished household income that may come after a divorce is finalized. Some people fight to retain ownership of a shared piece of property in a divorce only to find out later that the costs associated with maintaining the property are greater than anticipated. Additionally, some people will stop working altogether in an attempt to limit financial liability by claiming no income, but this only delays the inevitable.
In terms of taxes, divorcing couples who fail to plan may find even greater financial problems in time. Changes in various tax laws may cause someone who is providing support payments to take on additional tax burdens, and investment account withdrawals, pensions and other financial assets may also be affected by taxes after a divorce. Forbes recommends identifying risks prior to agreeing to any terms by working with an attorney who concentrates his or her practice on such matters.
The financial implications of a divorce can be overwhelming, especially during a tumultuous time of critical decision making. As such, people facing a divorce may seek out the guidance of a family law attorney to navigate complex issues like tax planning, spousal support and child custody arrangements. An attorney may provide representation for a divorcing spouse during settlement negotiations or in cases where a motion for divorce needs to be litigated in court.